What's up: The AI infrastructure build-out extends from coast-to-cost with projects announced by Microsoft, Meta and Anthropic; OpenAI releases "warmer, more intelligent" model; World Labs from AI pioneer Fei-Fei Li launches its first commercial world model product.

Good morning. Cursor, a startup that makes an AI coding tool beloved by engineers, has raised $2.3 billion at a $29.3 billion valuation, the WSJ reported this morning.

That’s nearly 12 times the value the company had in January and reflects its leadership in one of several years where AI is having the greatest impact so far. AI’s role is by many accounts most advanced in software development and customer service.

Inside the deal. Accel, which invested in Cursor’s last funding round, co-led this one with Coatue, a new investor, according to the WSJ. Existing investors such as Thrive Capital and DST Global also participated in this round, the company’s third this year. Other new investors include Alphabet’s Google and Nvidia, which Cursor invited to the round “to deepen the partnership,” co-founder and CEO Michael Truell told the WSJ in an interview.

Google provides artificial-intelligence services and cloud computing to Cursor and Nvidia is an enterprise customer. Nvidia CEO Jensen Huang has talked enthusiastically about Cursor.

Since you asked, the answer is no. The startup has rebuffed acquisition interest from a number of major AI companies, according to people familiar with the matter, WSJ says.

Maximum impact. Co-founded by four Massachusetts Institute of Technology graduates who are all still in their mid-20s, the company makes an AI tool that learns a developer’s coding style to help autocomplete, edit and review lines of code, according to software engineers. Since its launch in 2023, the tool has earned a cult following from professional engineers and top CEOs, from Huang to Stripe’s Patrick Collison, the WSJ says.

A path toward more independence. Cursor’s tool allows users to toggle between different AI models, for which it pays big AI-model companies. In October, the company launched its new AI model, Composer, that could eventually become an opportunity for it to reduce its dependency on third-party models and keep more of its revenue, according to the WSJ.

Tech continues to transform the heartland. It is still concentrated in a few hubs around the world and Silicon Valley remains the beating heart of it all. But its presence and its impact is expanding across the U.S. The latest evidence:

Microsoft on Wednesday unveiled a new class of data center built for AI training, WSJ reports. Based in Atlanta, the facility is two-stories tall, allowing for better networking and reduced latency,  and boasts a novel liquid-cooling system making it possible to place all the GPUs closely together, Microsoft says. The Atlanta complex spans more than 1 million square feet across 85 acres. It’s another sign that the classic-one story data center (ranch style?) is more often giving way to multistory developments that make better use of developable land.

Meta Platforms is spending more than $1 billion to build a data center in Wisconsin that will power AI work. The 700,000 square-foot data center will be located in Beaver Dam, Wisc. — a small city north of Madison and Milwaukee, Meta said Wednesday in a statement. It is expected to be operational in 2027, and support about 100 full-time jobs, Bloomberg reports.

Anthropic announced plans for data centers in Texas and New York, part of a nationwide $50 billion AI infrastructure build-out, CNBC reports.

The University of Chicago helped birth the atomic age. Could it one day launch a quantum one?  The university this week said it will partner with quantum company IonQ on research related to quantum science and engineering and work expanding its 124-mile-long quantum network. Together with UChicago-affiliated Argonne National Laboratory and Fermi National Accelerator Laboratory and work beginning on the Illinois Quantum and Microelectronics Park, the region is emerging as the “Silicon Valley of quantum computing.”

Over time AI is expected to create more jobs than it eliminates. But even if that's true, don't expect that transition to be painless. 

Private equity group Vista Equity Partners has told investors that it plans to cut its workforce significantly, using AI tools either to replace operational roles, some junior analysts and investor relations workers, or expand without hiring new staff, FT reports. It also plans to automate back-office roles that can be replaced with technology.

Chip software design company Synopsys will lay off about 10% of its workforce and close certain sites, WSJ reports. The restructuring plan follows Synopsys’ $35 billion deal for simulation company Ansys. Synopsys had about 20,000 employees at the end of its fiscal 2024. Ansys employed 6,500 people as of the end of last year.

OpenAI released GPT-5.1 today, which it calls an “upgrade” to GPT-5 that “makes ChatGPT smarter and more enjoyable to talk to,” The Verge reports. The new models include GPT-5.1 Instant and GPT-5.1 Thinking. The former is “warmer, more intelligent, and better at following your instructions” than its predecessor, per an OpenAI release, and the latter is “now easier to understand and faster on simple tasks, and more persistent on complex ones.”

World Labs, the startup founded by AI pioneer Fei-Fei Li, is launching its first commercial world model product, TechCrunch reports. Marble is now available via freemium and paid tiers that let users turn text prompts, photos, videos, 3-D layouts, or panoramas into editable, downloadable 3-D environments. World models are crucial to many applications of AI, including robots, that need an understanding of physics and how to move in environments such as warehouses. World models have been a growing priority for startups and tech giants.

Cisco Systems raised its fiscal year outlook after profit and revenue increased in its latest quarter, driven by demand for its AI products. The company said Wednesday it now expects revenue of $60.2 billion to $61 billion for the fiscal year, up from a prior range of $59 billion to $60 billion, WSJ reports.

IBM announced on Wednesday it has built a new experimental quantum computing chip called Loon that demonstrates it hit a key milestone toward making useful quantum computers before the end of the decade, Reuters reports.

Beginning Wednesday Waymo will be able to take riders in its San Francisco, Phoenix and Los Angeles markets on routes that include freeways, a first for U.S. robotaxis, Bloomberg reports.

Foxconn Technology Group, the world’s largest contract electronics maker, said it will collaborate with OpenAI with an official announcement planned for next week, WSJ reports.

The GOP-led House passed a spending package reopening the government and President Trump signed it into law late Wednesday, drawing to a close a record-long 43-day shutdown driven by Democrats’ demands to extend expiring healthcare subsides. (WSJ)

Rep. Adelita Grijalva (D., Ariz.) became the crucial 218th lawmaker to sign on to a bipartisan petition designed to force a House vote on releasing files related to late sex offender Jeffrey Epstein, putting her name down moments after she was sworn in to office. (WSJ)

The menu of options for how to watch shows and movies without cable continues to grow—as do their price tags. In recent weeks, the streaming platforms HBO Max, Hulu and Disney+ all hiked prices for at least some of their services. (WSJ)

The WSJ CIO Journal Team is Steven Rosenbush, Isabelle Bousquette and Belle Lin.

The editor, Tom Loftus, can be reached at thomas.loftus@wsj.com.